Like other insurers, it is playing on its ability to generate reliable profits and pay high income to attract investors.

Guy de Blonay, manager of the Jupiter Financial Opportunities fund, will be closely watching the listing. "If Esure is valued at the lower end of the price range currently being discussed, it would make an interesting investment case because of its attractive dividend policy," he said. "That said, other insurers, like Admiral, have been warning of a challenging environment for the UK car market. Rising claims costs are always a threat to car insurers, so it is essential Esure has a rigorous claims handling process in place to weed out fraud."

That "attractive dividend policy" is an aim to pay 50pc of taxed profits plus a special dividend of 20pc if its capital position remains as strong as it has been in recent years.

The Sheilas' Wheels owner is poised to drive onto the stock market with a value of £1.1bn after setting the price range for its flotation at between 240p and 310p.

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Interest has been heightened by the successful float of Direct Line, spun off by Royal Bank of Scotland in October. It came to the market at 175p and rose to a high of 225p in January. The shares have since come off the boil but still yield nearly 6pc. The company has committed to distributing 50pc to 60pc of after-tax profit as a dividend.

Insurers have been one of the best-paying sectors in terms of dividend income – ahead of the recent reporting season, they made up six of the 10 highest-yielding stocks in the FTSE 350.

But profit margins are being squeezed. Last month, RSA, formerly known as Royal Sun Alliance, announced a cut to the full-year dividend payment per share from 9.16p to 7.3p, causing the share price to plummet more than 14pc. As Sunday Telegraph readers were warned on these pages, that cut increased the chances that rivals would follow.

On Thursday, Britain's largest insurer, Aviva, did the same, shocking investors. The FTSE 100 company cut its full-year dividend from 16p a share to just 9p, causing the share price to fall (16pc) on the day.

The yield fell from around 7pc to 6pc but may slide to less than 5pc if Aviva goes on to cut the interim dividend in six months.

Richard Hunter from Hargreaves Lansdown stockbrokers called it a "major disappointment", but added: "Some may see the price drop as a potential entry point for what is now a recovery play."

Profit margins in the insurance market are being squeezed by a number of factors, including increased legislation from Europe and claims related to bad weather.

Since December 21, insurance companies have not been allowed to use a driver's gender as a factor when calculating their annual premium, despite the fact that historic data proved women motorists were at lower risk of making a claim. It also means insurers must offer the same deals to men and women on annuities and life insurance.

Catherine Barton, partner at accountants Ernst & Young's financial services team, said that the gender directive could push the industry into loss in 2013.

"At best the market will only just break even this year and the directive, along with a combination of legislative and market pressures this year, will put continued profitability under threat," she said.

Last month, Aviva said that whiplash claims were adding £118 to every motorist's annual car insurance bill. The insurer said premiums had risen by 80pc since October 2008 due to an increase in personal injury claims, especially whiplash.

Add to this the floods last year, which insurers estimated caused damage worth hundreds of millions of pounds, and you can see why some insurance companies are being forced to cut their dividend payments.

These factors will disproportionately affect those companies, such as Admiral, Esure and Direct Line, that specialise in "general insurance", such as car and home cover. Larger insurers, such as Aviva and Legal & General, also have large investment and life insurance businesses.

Henry Engelhardt, chief executive of Admiral, which yields 2.9pc, this week claimed 2012 was the insurer's "20th and most successful year to date". But Henry Dixon, manager of the Matterley Undervalued Assets fund, is cautious. "Admiral results were on the face of it well received, but we are bearish on the whole," he said. "With consumers becoming increasingly wary of buying the high-margin ancillary products such as roadside assistance that drives so much of their income, then there is some cause for concern."

Shore Capital Stockbrokers agreed, rating the stock as a "sell" despite shares rising after the results.

Mr Dixon's favoured play is Legal & General. In contrast to its peers, it increased dividends by 20pc last week, up from 6.4p per share to 7.65p. Analysts hadn't expected such a big rise.

Mr Dixon said: "The investment management arm, after a period of investment, is also about to pay significant dividends, and, when combined with a discount valuation, it is our favoured play."

Shore Capital rates L & G shares, which yield 4.6pc, as a "buy", adding that it could raise its dividend again in the future.

Mr Hunter also rates the Prudential as a "strong buy" due to its strong, stable cash generation and geographical diversity, including an increasingly important contribution from its Asian operation.

Pru is one of the lowest-paying shares, however, with a yield of just 2.5pc.

Standard Life, a widely held demutualised company, also reported results this week. It announced a one-off windfall dividend of 12.8p per share on top of a basic payout of 14.7p. That gives it a yield of 7.3pc for those lucky enough to already hold the shares.